LendIt USA 2017 Conference was held on March 6, appealing more than 5,000 fintech elites, enterprises, and investors from more than 40 nations to attend this exceptional event. As a representative of China's fintech company, Neo Financial, a subsidiary of Neo Capital Group was invited to announce its "Neo Capital's Strategic White Paper on Fintech".

Linda Wong, CEO of Neo Financial, shared experiences of the fintech strategies executed in recent years.According to PR Newswire press release on March 9, The fast-growing Neo Financial has drawn many attention, particularly the capital side subsidiary of the company, "Neo Online", has become the largest online inclusive finance platform in Southern China. On LendIt, CEO Linda Wong concluded that the future of fintech in China lies on mining out the long-tail customers. The most significant value of a company consists in optimizing the discovery process of quality assets.

The core value of finance technology lies on optimizing the development of quality assets

The fintech development in China is leading the world, generating a huge demand in the fintech investment in Asia Pacific region. As a result, the topics on "China's innovation in fintech" have become a hot trend in LendIt USA this year.

Linda Wong, CEO of Neo Financial pointed out that the core strength of internet fintech companies is the ability to develop and discover quality assets. With the slowdown of internet user growth, and the reduction of growth in online traffic, the cost of acquiring a customer is increasing. In addition to that, the major risk of peer-to-peer lending platforms comes from asset sides. The quality of the assets plays a critical role of the company's survival. Therefore, improving the ability of discovering quality assets and the quality of risk management are vital.

Neo Financial is transforming its business model from offline to an "online + offline" integration scenario, aiming to shift the current labor-driven business into tech-driven. On the asset side, Neo Financial builds up a network of salesmen throughout the nation, looking for quality microloan applicants. Meanwhile, on the capital side, Neo Financial acquires customers on its online platform, matching the two sides efficiently. By constantly upgrading its AI technology and big-data-facilitated risk management, Neo Capital is in an effort to optimizing the ability of discovering and approving quality assets.

Wong also explained that due to the regulations and the vulnerability of a single large asset, small and distributed asset is a must for enhancing risk management. And one of the major risks is the credit of borrowers. If the real credit status of a borrower can be traced and acquired, it is believed that the risk could be kept low.

Technology drives the rapid growth of inclusive finance

Fintech companies in China have developed inclusive finance platforms in an attempt to grow rapidly. As the existing credit system still has room for improvement, most of the fintech companies invest offline manpower to search for assets, meanwhile developing self-built risk management model to investigate the credit quality of the asset provider, to ensure the safety of the capital flow. However, this business model may lead to the imbalance of asset side. The operation effectiveness is therefore hard to be enhanced. This dilemma has become the general problem of the industry.

Some of the companies such as Neo Capital and Ping An Inclusive Finance have embarked on the enhancement of big data and deep learning automation. It seems inevitable for Neo Capital to initiate the transformation through technology.

Peng Tie, chairman of Neo Capital disclosed that by utilizing technology, the company is optimizing its business structure and manpower allocation. By clarifying each contact point of its financial service, it can attract more professional service providers to cooperate with Neo Capital, working together to revamp its business model and reduce its operating costs.

During LendIt 2017, Wong emphasized that labor-intensive finance companies must reduce its cost by utilizing technology. In order to accomplish two goals: to provide better financial products and services to customers, and to upgrade internal operation, fintech companies must reform their businesses by deploying big data and deep learning technology.

The next step: Neo Capital plans for IPO in USA

Neo Capital is striving to achieve all-around fintech implementation, aiming to accelerate its business growth. By applying big data technology and artificial intelligence, it can efficiently optimize process of risk management and achieve delicate management of clients and products. The effort would effectively reduce the threshold of its service and the amount of fees charged, further increase its operation efficiency and effectively reach the long-tail market.

One of the big data applications is building client personas. To increase the risk management capability, Neo Capital has developed personalized labels for each borrower to gain a better understanding of the object of risk management and reconstruct borrower behavior. The effectiveness of big data-facilitated risk management is enhanced when knowledge of user habits is mastered.

Wong also shared an interesting insight from Neo Capital. The analysis of client personas involves at various stages, including customer acquisition, risk evaluation, and during and after the lending process. With millions of borrowers' data accumulated and mined, Neo Capital discovered that if a customer is in default on a loan, borrowers with closer relations with him/her may have greater chance of being in default as well. With this kind of relation modeling, Neo Capital is able to make good control of the risk.

It is believed that Neo Capital will keep focusing on providing inclusive finance to individuals and small-size enterprises in 2017. Due to Neo Financial's advantage in deploying fintech infrastructure and its trustworthy risk management capacity, both the asset and capital sides of Neo Financial have the advantage of delivering quality services in the entire value chain.

With its rapid expansion, Neo Capital has revealed consideration of planning for IPO in the US last year. Neo Capital has been in touch with some of the well-known investment banks like JP Morgan. It is believed that Neo Capital has taken the opportunity of participating LendIt USA 2017 as one step further to get acquainted with international capital markets.